Australians are living longer than ever and are staying happy, healthy and active well into their old age.

Research released yesterday shows growing old will not be as unpleasant as many fear. 

The most comprehensive report ever undertaken into the wellbeing of older Australians, found 70 per cent of people over 64 have good or excellent health, and three-quarters of old people are living independently. 

The Institute of Health and Welfare report also found that our average life expectancy ranked fourth in the world at 80 years - 82 for women and 77 for men. 

It found many older people were both healthy and happy, with 72 per cent of males and 60 per cent of females aged 85 and over reporting that they had good, very good or excellent health. 

Ching Choi, head of the institute's health division, said the ageing population would accelerate when baby boomers entered the "older" age group in 2010. 

"But the important point is older people are quite active and participate quite fully in the community," Dr Choi said. 

And the proportion of people who did not live independently was small, he said. 

Only 3.7 per cent of males and 7.8 per cent of females over 65 lived in nursing homes or hostels. "There's a very small percentage of people end up in nursing homes even when they're very old," he said. 

Australians work well into their later years: 5 per cent of males and 2 per cent of females over 85 were in the labour force, and 21 per cent of males and 10 per cent of females aged 65 to 69 worked.